US Secretary of State Hillary Clinton has
just visited the country and is sending her
Special Envoy for Eurasian Energy, Richard
Morningstar, to Sofia next week. Alexei Miller,
chief executive of Russian gas giant Gazprom is
also scheduled to visit next week, following
completion of a visit by a trio of Bulgarian
government ministers to Moscow.

Morningstar's visit will come in the wake
of a decision three weeks ago by the Bulgarian
cabinet to ban the use of hydraulic

fracturing ("fracking")
technology by the US oil firm Chevron, after
having awarded it a license to explore the
potential of shale-gas reserves in the northeast
of the country.

At stake is the
geo-economic shape of the extended and complex
regions around the Black Sea and Caspian Sea
basins, stretching from southeastern Europe to
Central Asia, not to mention the future of the
energy ledger of the European Union, which already
imports gas from Russia via the newly opened North
Stream pipeline under the Baltic Sea to Germany.

The newly announced Trans-Anatolian Gas
Pipeline (TAGP, running east to west across
Turkey, also called TANAP after its initials in
Turkish), agreed bilaterally between Azerbaijan
and Turkey just weeks ago and to be four-fifths
directly financed by Azerbaijan, has stolen a
march on the long-planned multilateral Nabucco
project, backed by the European Union.

When first announced at the end of
December, the TAGP was assigned an initial design
volume of 16 bcm/y. In January it was made public
that the final capacity would be set at 24 bcm/y.
This figure has recently been raised to 30 bcm/y,
equivalent for all intents and purposes to
Nabucco's projected design volume of 31 bcm/y.

At the same time, advocates of Russia's
South Stream project are trying to get their foot
in the door by the end of this year, claiming
landfall in Bulgaria in order to circumvent
conditions of the EU's new energy package. Yet it
is difficult to see how South Stream would
increase security of supply to Bulgaria, which
already depends on Russia for 90% of its natural
gas.

Although this represents only 10% of
its total primary energy supply, half of that goes
for electricity generation, another quarter for
industrial production, and most of the remainder
for transport systems. A third of Bulgaria's total
energy consumption is sourced from highly
polluting coat and peat, and nearly a quarter from
nuclear plants. The desire to move to more
environmentally friendly natural gas is clear.

A number of obstacles stand in the way of
the successful completion of the South Stream
pipeline. Perhaps the most notable is the same
obstacle over which Russian political and gas
industry officials have continually criticized the
Nabucco project: no sources for the gas to be
transmitted have been identified.

South
Stream's projected volume has always been declared
at 63 billion cubic meters per year (bcm/y), and
it is now clarified that this would putatively
consist of four 15.5 bcm/y strings. In practice,
that could mean starting with one string of 15.5
bcm/y with the potential for scaling up if
quantities ever become available.

Nor is
the route definitely established. Up until the end
of December, Gazprom had touted two legs for South
Stream, one through southeastern Europe to Austria
and the other across Greece to Italy. Six weeks
after the inauguration of the present Greek prime
minister, Lucas Papademos, a technocrat and
political independent, Gazprom's Miller and
Russian Prime Minister Vladimir Putin in a joint
television appearance discussed with one another
dropping the second of the two legs.

Yet
four weeks later, after Miller met in Moscow with
Antonis Samaras, the head of Greece's New
Democracy party, the company issued a statement
putting it back on the table. Two weeks after
that, an unnamed former energy minister in Athens
told the weekly New Europe that the construction
of the southern branch would not begin before 2015
(if it ever did). Yet the design criteria for the
South Stream pipeline remain officially unchanged.

It is of interest that in November last
year, before the TAGP was officially announced,
Bulgaria and Turkey agreed on a natural gas
contract for supply of gas via the ITG to a
115-kilometer Interconnector Greece-Bulgaria
(IGB). At the time, the volumes being discussed
were on the order of 1-3 bcm/y, with the
possibility this might rise to 5 bcm/y. That
quantity exceeds Bulgaria's current needs and
could therefore allow for gas being sold onwards
to other southeast European countries.

A
small additional number of relatively inexpensive
reversible interconnectors in the region such as
the IGB (such a the already completed Arad-Szeged
line from Romania to Hungary) could implement a
gas ring in Southeast Europe sourced from
Azerbaijan.

Thus, although the Nabucco
project increasingly looks to be falling by the
wayside, the new TAGP project could in effect take
its place, and Bulgaria could draw advantage from
this development.

Dr Robert M
Cutler (http://www.robertcutler.org),
educated at the Massachusetts Institute of
Technology and The University of Michigan, has
researched and taught at universities in the
United States, Canada, France, Switzerland, and
Russia. Now senior research fellow in the
Institute of European, Russian and Eurasian
Studies, Carleton University, Canada, he also
consults privately in a variety of fields.